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Threat of Rural Hospital Closures

As rural hospitals and health systems remain a critical component of healthcare access for many in America, CEOS must be equipped with the knowledge and information needed to navigate the increasing threat of closures. In recent years, the threat of rural hospital closures has been a severe concern for healthcare CEOs, patients, and communities who depend on these hospitals for care and economic support.

Challenging demographic

Rural hospitals often face tough demographic challenges, including declining and aging populations, higher poverty levels, and a lack of resources to support healthcare access. Many rural communities face severe healthcare workforce shortages due to the difficulty of recruiting healthcare professionals to rural areas. Consequently, many rural hospitals operate on razor-thin margins as they struggle to provide healthcare for their communities.

Across the United States, roughly 35% of all hospitals are located in rural areas. Nearly half have 25 beds or less, and only 16% boast more than 100 beds. Because they tend to be much smaller than urban facilities, patients with higher acuity levels often need to travel or get referred elsewhere for care--resulting in an acute care occupancy rate of 37%, which is significantly lower (2/3rds) than that seen at larger urban hospitals (62%).

This leads to the next challenge for rural hospitals.

Where is my money

Rural hospitals confront unique reimbursement obstacles, and these medical facilities are more inclined to offer treatment for a population that depends heavily on Medicare and Medicaid. As such, they cannot bridge the gap between low public program payments with higher reimbursements from those who possess commercial coverage - unlike suburban or urban centers, which can obtain revenue through patients insured by commercial payers.

Furthermore, the current healthcare landscape requires more than just reimbursement; rural hospitals need access to capital to invest in technology and make necessary improvements. This can be incredibly challenging for rural hospitals already operating on thin margins and struggling to remain financially viable.

No digital transformation

Rural hospitals have unique challenges when adopting the latest healthcare technology. Many cannot invest in the digital infrastructure, tools, and staff training required to stay competitive in healthcare today. This lack of access to necessary digital resources means that rural hospitals may miss out on critical healthcare innovations and advancements that could improve healthcare delivery for their patients and communities.

In conclusion, the threat of rural hospital closures is a severe concern for patients and communities who depend on these hospitals for care and economic support. The coronavirus pandemic has brought unprecedented healthcare challenges to rural communities in the United States, including limited staffing, resources, and funding; tough reimbursements; and difficulty accessing capital. Healthcare CEOs, patients, and communities must understand rural hospitals' unique challenges to ensure their long-term viability and sustainability.





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